West Coast Housing Market Heating Up

Source: National Mortgage Professional Magazine               Homes_on_Market

Pro Teck Valuation Services’ July Home Value Forecast (HVF) reports this month that many of the West Coast metro areas are toward the top of the market ranking while the East Coast is toward the bottom. The authors look at the top and bottom 10 rankings from 2011 to see if there are any major similarities or differences in the markets today. New top and bottom 10 market rankings are also updated for the month.

In July’s Home Value Forecast update, interestingly, the authors found that Seattle moved from the bottom 10 in 2011 to the top 10 in 2014. Seattle had its highest percentage of REO properties between the first quarter of 2011 and first quarter of 2012, and hit the bottom in average price per living area in third quarter of 2011, according to the HVF. The higher numbers of REOs were quickly worked through the system (non-judicial foreclosure process), leading to a sustained recovery today.

This authors also saw this trend by comparing REO to Regular sold price per square foot of living area. July’s HVF says that the “REO discount” (REO price/Regular sale price) was largest in Seattle from the second to fourth quarter of 2011, averaging 40 percent. Today that number is 24 percent and trending toward historical norms.

“Looking back, we see a very different picture,” said Tom O’Grady, CEO of Pro Teck Valuation Services. “The top markets in the East had significant price declines from their peak levels, which had been moving sideways or slightly downwards for more than two years. On the West Coast, in 2011, the bottom market home prices, including Seattle, held up quite well since the peak in the market and they were able to more quickly work through their REO inventory.”

This month’s Home Value Forecast update also includes a listing of the 10 best and 10 worst performing metros as ranked by its market condition ranking model. The rankings are run for the single – family home markets in the top 200 CBSAs on a monthly basis. They highlight the best and worst metros with regard to a number of leading real estate market indicators, including: sales/listing activity and prices, months of remaining inventory (MRI), days on market (DOM), sold-to-list price ratio and foreclosure and REO activity.

“All of our top 10 markets are from the western United States and all are exhibiting traits of very tight market – low inventory (active listings down), low Months of Remaining Inventory (MRI), lower days on market and high sale price to list price ratio,” said O’Grady. “These hot markets are leading to very competitive prices for sellers.”

July’s top CBSAs include:
Modesta, Cali.
►Portland-Vancouver, Ore.-Wash.
►Santa Rosa, Calif.
►Seattle-Bellevue, Wash.
►College Station-Bryan, Texas
►Lubbock, Texas
►Oakland-Hayward-Berkeley, Calif.
►Sacramento-Roseville-Arden-Arcade, Calif.
►San Antonio-New Braunfels, Texas
►Stockton-Lodi, Calif.

“We believe that higher foreclosure numbers and more than six months inventory in all of the markets are the reasons the metros in the bottom ten continue to see a slower recovery,” added O’Grady. “However, many of the indicators are trending positive.”

The bottom CBSAs for July were:
Akron, Ohio
►Gary, Ind.
►Hagerstown-Martinsburg, Md.-W.Va.
►Jacksonville, N.C.
►Lakeland-Winter Haven, Fla.
►Mobile, Ala.
►Orlando-Kissimmee-Sanford, Fla.
►Racine, Wis.
►Tampa-St. Petersburg-Clearwater, Fla.
►Youngstown-Warren-Boardman, Ohio-Pa.